Konkola Copper Mines has been ordered to pay U&M Mining Zambia a sum of US$ 90 million by the London International Court of Arbitration for breach of contract.
U&M had dragged KCM to the London International Court of Arbitration for prematurely terminating the contract which resulted in heavy losses.
U&M started the London International Court of Arbitration proceedings and KCM obtained an ex parte interim injunction in the Ndola High Court compelling U&M to vacate the mine immediately.
U&M subsequently obtained an ex parte anti-suit injunction from the English Court preventing Konkola from taking steps in the Zambian proceedings on the grounds that it was in breach of the arbitration agreement which required London International Court of Arbitration.
The English Court was asked to decide whether the seat of the arbitration commenced by U&M was England and if so, whether the English Court had exclusive jurisdiction to grant interim relief in support of the arbitration.
The Judge found that the seat of arbitration was London, notwithstanding Konkola’s submissions that the seat was Zambia because of the close connection of the parties, their contracts and their dispute to Zambia.
The Judge found that there was no clear evidence to indicate that the parties agreed to choose a seat other than the place of the arbitration, and thus held that the general principle that the seat is “in most cases sufficiently indicated by the country chosen as a place of arbitration” should be followed.
The Court ruled that whether Konkola was nevertheless entitled to apply to a foreign court to obtain interim relief in (Konkola submitted) support of arbitration.
The Judge held that, on the facts, the answer lay in the contractual arrangement between the parties and decided the question on the basis of interpretation of the contracts and London International Court of Arbitration rules.
The Judge found Econet Wireless Ltd Vs Vee Networks Ltd to be the most relevant authority on the point which found that the natural court for the granting of interim injunctive relief will normally be the court of the country of the seat of the arbitration.
The Judge added that where the seat of the arbitration is abroad, the English Court will need a very good reason to exercise its jurisdiction to grant interim relief in support of the foreign arbitration.
The Judge added that to say ‘a party may exceptionally be entitled to seek interim relief in some court other than that of the seat, if for practical reasons the application can only sensibly be made there, provided the proceedings are not a disguised attempt to outflank the arbitration agreement.
A KCM Spokesperson confirmed the ruling but refused to comment further on the matter.